Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
With the reversal now obvious (since the Fed announcement, September 18th), we have the usual suspects putting out ‘content’ (here and here) letting you know what’s already happened.
In Prechter’s book, The Wave Principle of Human Social Behavior, he states, being part of the herd, is hard-wired into the brain.
Therefore, it takes diligent, consistent effort, to go against the mindless (limbic brain) herd if you’re going to make an objective observation.
So, let’s do just that, taking an objective look at the potential effects of the bond reversal.
Bonds (TLT proxy) began its reversal, rates higher, the day before the last Fed announcement.
The IYR, reached its high that Wednesday, 9/18/24.
Real Estate IYR, Weekly
It’s been nearly three years since the all-time high in December, of 2021. The wedge shown below has been just over a year in the making.
The reversal action of the past few weeks can be seen in the ‘Throw-Over’ area of the chart.
If the wedge has been identified correctly, price action has now entered back into that formation.
Positioning
This post highlighted a short position was on the horizon.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
As the chart shows, real estate and bonds (interest rates) have been well correlated for over three years.
There are times, when that correlation gets ‘spread’; one market goes one way, while the other market goes … well, the ‘other’ way.
That time appears to be now.
Long Bonds TLT & Real Estate IYR, Daily Close
Note how the ‘spread’ eventually gets closed.
Note: The first spread on the left part of the chart took several months to close (completed in late July 2023).
The correlation remained near exact until about January 2024, where it began to diverge again.
Now, we’re spread with bonds heading lower (rates higher) helped along with the latest ‘jobs data‘.
Positioning
If time permits, we’ll go into price action posted yesterday and how this series of two IYR, price bars, yesterday, the day before, are (almost) exactly like DE (John Deere) price action shown by Daivd Weis on his video … except taking it from a short perspective.
Current position DRV-24-05, remains intact; stop now moved tentatively to the DRV session low for today (not advice, not a recommendation).
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
The (potential) big ruse, interest rates are heading lower. We have the usual suspects, spinning how soon we’ll have the next rate cut.
Well, back at the ranch, home builder Lennar Corp. (LEN), posted massive down-thrust, selling energy this past Friday, after Thursday’s post-market earnings release.
As we’ll see below, force on the move was potentially the second highest ever, in the history of trading for the company (data going back to 10/5/18).
Lennar Corporation LEN, Daily
At this point (11:27 a.m., EST) LEN is having an ‘inside day’, trading within Friday’s price action.
Inside days are typically preparation for another kind of day, an ‘outside’ day 🙂
That’s where the trend is confirmed (not advice, not a recommendation).
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Those monitoring this site are witnessing the search (for the short entry) in real time.
As said in the prior update, just because Fibonacci lines up, both in time and distance, does not guarantee anything.
From a Wyckoff perspective, as a result of Wednesday’s XBI price action penetrating the prior days’ low, and then stopping dead, there was a probability of a (minor) spring … which we got the very next day.
By the way, that upward move (yesterday) carried the XBI, near another Fibonacci retrace level: 61.8%.
As a result, the LABD-24-17, was exited with about a 3.6% loss (not advice, not a recommendation).
Now, on to the action at hand.
Real Estate IYR, Daily
Depending how price action progresses, we’ll go into more detail on the technical condition.
Today printed a new daily low and we have an MACD (bearish) crossover still in effect.
Trade action was to go short via DRV with a representative stop (for DRV) one tick above the IYR high: 95.96 (not advice, not a recommendation).
Admittedly, it’s a tight stop and that’s the point.
If IYR turns and starts to exhibit buoyancy, we don’t want to hang around.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Every day, the tape prints one more clue to the next probable direction.
The next probable direction.
Part of an experienced speculator’s pre-market prep is to know from the prior session, the ‘correct’ answer for the current session.
That is, if a set-up has materialized, then subsequent price action will have a specific or variation of a specific pattern.
If the pattern posts on the tape, we have the ‘right’ answer. If not, probabilities are saying ‘no’ at this point.
Of course, the hard part and according to Wyckoff, it laterally takes many years of observing and working with price action to know what to expect.
Real Estate, ‘Wrong’
This morning’s session in real estate, IYR did not post the ‘right’ answer from a short standpoint. A lower open and lower print was the expectation.
Therefore, DRV-24-02, was exited with just over a 2%, loss (not advice, not a recommendation).
However, oil and gas XOP, gave the ‘right’ answer.
Oil & Gas XOP, Daily
The circled price action is what we’re looking for (not advice, not a recommendation).
There’s a lot going on with this chart.
If XOP continues lower and short, DRIP-24-01, is not stopped out or exited, we’ll re-visit this action with further updates (not advice, not a recommendation).
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer herexop
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
The Danger Point® 